Getting out of credit card debt, how?

Getting out of credit card debt, how?

Hello. I decided to check out my credit today, for the first time in a while. I was a little surprised at how low my credit score was. Trans was 608 and Equifax was 618, it looks like what has my scores low is high balances on revolving credit. I have no late payments, no collections.. just high balances that total around $27K (result of a divorce a couple of years ago). I am limited as to how much I can pay on the cards each month, so it seems like I will never pay them off. I had someone call me from Wells Fargo a few weeks ago, and he asked if I was interested in a consolidation loan. What are the thoughts on that? Would I even qualify for a loan wit my score so low, even with otherwise perfect credit?

My main concern for getting my score up is that I am going to be moving in with my boyfriend in the next few months and he wants to re-fi his house and put me on the loan.

Re: Getting out of credit card debt, how?

Have you calculated how much you would be able to pay towards your credit card every month? You need to do that so you can figure out how to go about this.

Why does your boyfriend want to add you on his refi? If you guys break-up, you don't want to pay for HIS house. Are your credit scores better than his? If so, then the reason why he wants to add you on the refi is to get financed at a lower interest rate.

It would be a good idea to apply for a consolidation loan for many reasons. If approved, you will be able to increase your scores by "moving" your revolving debt into a loan which doesn't have any impact on your utilization. Also, you wouldn't have to worry about making multiple credit card payments, all you need to remember is one due date and pay the amount due. Third, you would increase your scores by having a mix of credit.

You need to take your monthly income and your expenses and figure out how much money you have left to pay off your debt. You need to this especially if you're going to apply for a loan. If the monthly payment for the loan exceeds the amount of money you can put up toward your credit card debt, then there's no point in accepting the loan.

Re: Getting out of credit card debt, how?

I got a call from Wells Fargo regarding a loan as well, my credit scores are a bit higher than yours at 650+. They told me they had to send the application to a loan officer and that I would get a call back if I qualified but I never heard back from them.

You might want to look into TCA, even many people here seem to hate them:

Re: Getting out of credit card debt, how?

finman's post used to be here --removed as spam.

Nice catch, Susyquk! --hauling

Or before you pay someone soliciting for business on the boards you could try contacting the Credit Card companies yourself and see if any of them will help you with negotiating on your rates, suspending interest if you pay off within a certain amount of time, paying your smallest balances down to zero first so that you can then take the minimum payments for those and apply to the next smallest balance. Sell anything you don't need/haven't used in the last 6 months (chances are you never will), apply for a part time job. Do anything and everything you can.

You also need to pull your full credit reports (you get one from each CRA per annum) and check there are no lates/collections/baddies on there you are not aware of.

The boards here have great advice (have helped me a ton) to help you although it may be slow and steady it took time to get to where you are now and you will get back up there through working hard at it and being aware. You can do it!

Re: Getting out of credit card debt, how?

gooseybear wrote:

Hello. I decided to check out my credit today, for the first time in a while. I was a little surprised at how low my credit score was. Trans was 608 and Equifax was 618, it looks like what has my scores low is high balances on revolving credit. I have no late payments, no collections.. just high balances that total around $27K (result of a divorce a couple of years ago). I am limited as to how much I can pay on the cards each month, so it seems like I will never pay them off. I had someone call me from Wells Fargo a few weeks ago, and he asked if I was interested in a consolidation loan. What are the thoughts on that? Would I even qualify for a loan wit my score so low, even with otherwise perfect credit?

My main concern for getting my score up is that I am going to be moving in with my boyfriend in the next few months and he wants to re-fi his house and put me on the loan.

Any input/advice is very much appreciated!

Thanks,

Becky

Do you have any 0% or low rate transfer offers from any of your cc's? If you can restructure your debt into lower rates while you focus on debt reduction, this will assist you by allowing you to pay the savings in interest toward principle.

Also, here are a few other ways to get serious about this. They are not convenient, but they do the job and you would never regret the results.

1. Create a written budget. Identify all income and all expenses.

2. Kill all non-essential spending. No eating out, no movies, no impulse buys.

3. Buy generic and store brands for food and personal care. This will on average save you at least 20% on these type of expenses.

4. Adjust your AC thermostat up a few degrees (going to feel a bit warmer in the house) and the heating down a few degrees (may need a sweater at night). This will save at least 10% on your current utilities.

5. Sell stuff. The stuff you don't use, don't want, don't even rememeber stored in the garage, closet, under the bed or in paid storage. Sell stuff that you don't need or is a luxury you really can do without. Have a garage sale, ebay sale, craigslist sale.

6. Consider getting another part-time job. An extra $300 to $800 per month will let you get out of debt much faster.

7. Don't accumulate any new debt.

These are ideas that can help you maximize your "get out of debt" mode. Good luck and happy hunting (kill the debt hunt)

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.